Investment Case

Priorities for capital

Data for year ending 31st December 2023.
Organic growth

Capital investment remains core to strategic growth.

Delivery over the last 4 years
2020
2021
2022
2023
R&D and new product development
  • Continued focus on R&D and NPD
Delivery over the last 4 years
2020
2021
2022
2023
Ordinary dividends
Maintaining dividend cover of two times adjusted earnings
Delivery over the last 4 years
2020
2021
2022
2023
Balance sheet leveraging
Target to redce net debt to around one times adjusted EBITDA by December 2025
Delivery over the last 4 years
2020
2021
2022
2023
Selective acquisitions

Target selective bolt-on acquisition opportunities

Delivery over the last 4 years
2020
2021
2022
2023

Strong business fundamentals

  • Diversified product offering with exposure to strong, long-term growth markets across varied construction sectors
  • Reputable brand proposition across hard landscapin, roofing, water drainage and concrete walling products.
  • Market leading positions in landscaping and roofing; significant growth opportunities in intergrated solar, water management products and lower-carbon concrete bricks
  • Excellent manufacturing footprint across the UK with a well invested asset base

Focused growth strategy

  • Credible strategic goal to become the UK's leading manufacturer of sustainable solutions for the built environment
  • Delivered PBT CAGR of 24 per cent between 2013 and 2022, before 2023 market downturn
  • Product and service innovation with demand generation strategy for project specificatios, drive customers to Marshalls and Marley solutions
  • Continued investment in facilities and technology to improve efficiencies and broaden the product range
  • Combination of organic growth supplemented by complementary transactions to deliver sustained through-cycle growth

ESG market leadership

  • Sector leader in sustainability for over 20 years
  • First in the UK construction materials sector to obtain approved science-based targets for carbon reduction
  • Creating better places through the core pillars of "better product, better workplace and better world"
  • Trend towards increased ESG, weighting in customer procurement decision making
  • Commitment to net zero and new carbon reduction targets for enlarged Marshalls Group submitted to the Science Based Targets ("SBTi) initiative for validation

Robust risk management

  • Formal process to identify, analyse and assess current and emerging risks with active engagement from the Executive Team and Board
  • Mitigating controls continually monitored by management
  • Controls periodically audited by external parties
  • Detailed active plans developed for identified risks

Well positioned for a recovery in our markets

  • Flexible cost base and manufacturing sites provide management with optionality to right-size the business
  • Significant operational capacity to satisfy increased demand
  • Operating margins expected to benefit from high operational leverage when volumes improve with market recovery, with a medium-term target of 15 per cent

Focus on driving shareholder value

  • Long-term track record of generating shareholder returns - total of £217 million dividends paid in ten years between 2014 and 2023
  • Opportunity to deliver progressive earnings growth and adjusted ROCE of 15 per cent over the medium term
  • Cash generative business model with a strong balance sheet with a well-defined capital allocation policy
  • Focus on driving organic growth, supplemented by periodic, complementary bolt-on acquisitions
  • Sustainable, through-cycle dividend policy, targeting 2x cover by adjusted earnings
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